S'pore May inflation held at 7.5% from a year ago
Rise was due to higher food, transport and housing costs. -ST
FOOD prices in Singapore shot up by 9 per cent in May due to a range of dearer food items including rice, milk, fresh vegetables, poultry and cooking oil, pushing the month's Consumer Price Index (CPI) up by 7.5 per cent from a year ago.
The price index matched the pace in April, according to the Department of Statistics on Monday.
The inflation rate will average 6 per cent this year, up from a median prediction of 5 per cent in March, according to a Monetary Authority of Singapore survey of 21 economists released last week. Consumer prices will probably gain 7.5 per cent in this quarter, the survey showed.
MAS has allowed the Singapore currency to strengthen at a faster pace against the US dollar this year, saying the exchange rate remains its most effective tool to fight inflation.
Food prices, which make up 23 per cent of the index, rose 9 per cent in May from a year ago, following April's 8.5 per cent increase. From April, food prices gained 0.8 per cent.
Oil has almost doubled in the past year, and prices of grains such as rice, corn, wheat and soybean reached unprecedented levels in 2008.
Transport and communication costs, the second-biggest component at 22 per cent of the consumer price index, climbed 6 per cent in May from a year earlier. From April, transport and communication prices rose 0.6 per cent.
Record oil prices are increasing fuel and transport costs for consumers. Crude reached an unprecedented US$139.89 (S$190.84) a barrel on June 16.
Housing costs, the third-largest component of the price index, climbed 12.4 per cent from a year earlier. From the previous month, housing prices rose 0.5 per cent.
On a three-month moving average month-on-month basis, the consumer price index rose by 0.5 per cent in May.
Inflation for the first five months of this year was 7 per cent higher compared with the same period last year.
'Inflation will probably moderate in the second half of the year,' Mr Ng Shing Yi, an economist at United Overseas Bank in Singapore told Bloomberg on Monday. 'That will allow the central bank to remain on hold rather than tighten monetary policy at its next review in October.'
Elsewhere in Asia, food and oil-related items are also driving inflation to near or above double digits.
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